Nintendo expects first loss ever.

[Hep038]

http://money.msn.com/top-stocks/post.aspx?post=41246ef1-b1ea-4229-9637-1806d1504378

Yikes. Never saw that coming. I am sure everyone here will have a theory or a excuse. Either way I never thought I would see a headline like that.

[BlastProcessing402]

Launching an expensive handheld, in a crappy economy, while your console sales are winding down. It's like a perfect storm of financial woe.

[RCM]

Launching an expensive handheld, in a crappy economy, while your console sales are winding down. It's like a perfect storm of financial woe.

Times are changing and Nintendo clearly isn't willing to... yet. We'll see what happens with Wii U, but I predict the demand is about as high for that console as 3DS was at launch.

[Ludwig]

The Wii was brilliant, it was cheap and fun for everyone, that's in my opinion what people expect from Nintendo, they fallen from that quite a bit. The original GameBoy cost 100german mark here, if we account for inflation that still should be less than 80Eur. Well, it had to happen sooner or later, no big deal, they know how to pull themselves out of this again, many games though also leave a lot to be desired. Maybe a little loss is a good wakeup call, and hopefully in the end also good for quality.

[Frankie_Says_Relax]

Launching an expensive handheld, in a crappy economy, while your console sales are winding down. It's like a perfect storm of financial woe.

I can't disagree with that, and I'll add to it that whether or not any of us agree with any assessment that they're "legitimate game systems" the smartphone market has had a measurable impact over how people utilize their "portable gaming time" or service their desires to do so.

That said, I do like really like the 3DS and I'm disappointed that it's not doing well for Nintendo.

[crazyjackcsa]

I would like to point out that the bulk of the loss was due to currency valuations/fluctuations.

[Aussie2B]

Yeah, it's absolutely absurd how high the value of the yen is right now.

Anyway, eh, big deal. Nintendo has been around for a LONG time, and this ain't gonna kill them. They're already pulling moves that American companies wouldn't even dream of, like the higher-ups at Nintendo volunteered to take a significant decrease to their paychecks for the time being for the good of the company.

[Collector_Gaming]

Yeah, it's absolutely absurd how high the value of the yen is right now.

Anyway, eh, big deal. Nintendo has been around for a LONG time, and this ain't gonna kill them. They're already pulling moves that American companies wouldn't even dream of, like the higher-ups at Nintendo volunteered to take a significant decrease to their paychecks for the time being for the good of the company.

probably cause no one wants to be the direct cause of the downfall of the beloved nintendo

and Nintendo has been around for a hundred or so years. This aint their first rodeo.

[Icarus Moonsight]

I would like to point out that the bulk of the loss was due to currency valuations/fluctuations.

Nintendo is heavy holder of USD. If you think this is bad, just wait some more. For a long time, holding USD over JPY was a good move. We are only at the start of our lost decade though. They didn't miss the switch window, just the optimal one. Some heavy US investors switched over from USD holdings to RMB and JPY years ago, and they did great for it.

[VertigoProcess]

Its funny cuz they mentioned that nintendo is now loosing customers to smartphone and tablet gaming and the wii u is a tablet like gaming system... seems they might have knew this was coming and already started correcting...

[skaar]

Apparently Nintendo should buy gold. I knew those radio ads were right.

[BetaWolf47]

I thought they had experienced some losses long before they got into video games... or even Hanafuda cards.

[Aussie2B]

There was no Nintendo before Hanafuda cards. The company was founded for the purpose of producing them.


probably cause no one wants to be the direct cause of the downfall of the beloved nintendo

To be fair, even before taking the large hit to their paychecks, they weren't making remotely close to what American CEOs and the like make. Their paychecks couldn't be blamed for the losses. Japan as a whole doesn't really have the sickness of American business in which our CEOs get disgusting amounts of money.

[Clownzilla]

I would like to point out that the bulk of the loss was due to currency valuations/fluctuations.

I think it has more to do with their stalling product. For each Nintendo company in Japan there is some other company making money regardless of the strong yen. I have loved Nintendo since my NES in 1986 but this isn't the Nintendo I remember. The Wii and the DS were great achievements for Nintendo (which I both own and love) but the 3DS and the Wii U are mistakes. Nintendo needs something revolutionary to survive and the 3DS and Wii U are just better versions of old ideas. Even though Nintendo has some cash in the bank and have been around for over a century they still can go out of business if they don't produce what people want to buy.

[SteveSpeeze]

Launching an expensive handheld, in a crappy economy, while your console sales are winding down. It's like a perfect storm of financial woe.

i dont think i coulda put it any better myself.. but yep ..
thats it in a nutshell.

[Collector_Gaming]

Apparently Nintendo should buy gold. I knew those radio ads were right.

you think they may wanna start by reclaiming their gold carts?

http://www.listropolis.com/wp-content/uploads/2008/04/gold_zelda.jpg
i got 1 they can get purchase back! :p

[SteveSpeeze]

They shoulda just released a system that downloads from the wii shop emulated games.. with a decent controller. and add more roms,, for fair prices.
system sell for like 90 bux. and screw the handhelds.

I see so many people buy handhelds.. and only turn them on for like 5 mins then shut em off. I think people buy those just to front them.

[VertigoProcess]

They shoulda just released a system that downloads from the wii shop emulated games.. with a decent controller. and add more roms,, for fair prices.
system sell for like 90 bux. and screw the handhelds.

I see so many people buy handhelds.. and only turn them on for like 5 mins then shut em off. I think people buy those just to front them.

I play my gameboy micro for at least 8 hours a day at work...

[Gameguy]

That said, I do like really like the 3DS and I'm disappointed that it's not doing well for Nintendo.
It's doing very poorly in Japan, at least that's what I can find.

http://www.videogamer.com/news/third_of_japanese_3ds_owners_regret_their_purchase .html


Third of Japanese 3DS owners regret their purchase

A survey in Japan has revealed that a third of 3DS owners regret buying the handheld in light of the upcoming price drop.

Nintendo announced the price cut last week, with Nintendo President Satoru Iwata taking responsibility for poor sales, and taking a 50 per cent pay cut as a result.

To soften the blow for anybody that's just bought the device, Nintendo will be giving away free games for existing 3DS owners. The 3DS Ambassador Programme will offer a variety of GBA and NES games, including Super Mario Bros., The Legend of Zelda and Donky Kong Jr., as an apology.

That said, of the 6,500 people surveyed, over 30 per cent said that they felt "anger or regret" about the price drop, and explained that free games did little to compensate for this.

Worryingly, 49.4 percent of those surveyed said that the current line-up of games available for the console were not adequate, and admitted that they felt "disappointed" with the system - even with knowledge of games due to hit the machine in the near future.

To back that up, 45.7 per cent said that they were either not planning, or were "on the fence" about buying Super Mario 3D Land and Mario Kart 7 - two of what would be considered the biggest upcoming games for the system.

Of those surveyed who do not own a 3DS, a mere 5.4 per cent said they were planning to buy one after the price drop. Of those who had no intention of buying a 3DS, 42.1 per cent blamed the poor selection of games currently available, and 15.3 per cent revealed that they will never buy one.

The main reason why the original Gameboy did so well was because it was much cheaper than the competition and had a much longer battery life, plus it was bundled with a recent popular game that everyone wanted. What exactly does this new handheld have to offer besides the 3D? Not counting any games that are ports, sequels, or remakes of 10+ year old games. I can't think of anything that interests me, and I still haven't found a kiosk to try one out to see the 3D effect in person. I only saw one in a Best Buy and that was it, I haven't bothered to go back yet as I rarely shop there.

In any case I'm not surprised, they really released too many DS/DSi variants so I can't see many average consumers wanting to upgrade again with so few good games available for this new system.

[crazyjackcsa]

I think it has more to do with their stalling product. For each Nintendo company in Japan there is some other company making money regardless of the strong yen. I have loved Nintendo since my NES in 1986 but this isn't the Nintendo I remember. The Wii and the DS were great achievements for Nintendo (which I both own and love) but the 3DS and the Wii U are mistakes. Nintendo needs something revolutionary to survive and the 3DS and Wii U are just better versions of old ideas. Even though Nintendo has some cash in the bank and have been around for over a century they still can go out of business if they don't produce what people want to buy.

You can think it, but it doesn't make it true. The bulk of Nintendo revenue comes from outside Japan. So, as the Yen appreciates, as it has quite a bit this year, they actually lose money. A full 2/3's of the loss is due to currency exchange. As per gamasutra "Half-year losses were 70.2 billion yen ($926.3 million), missing Nintendo July forecast of a net loss of 35 billion yen ($461.9 million) for the half-year. The strong yen amounted to exchange losses of 52.4 billion yen ($691.6 million). Sales were 215 billion yen ($2.8 billion), missing the half-year forecast of 240 billion yen ($3.2 billion)"

I'd also like to point out that Nintendo only started reporting in the 1980's. So it the first loss in 30 years, not 100.

[Clownzilla]

You can think it, but it doesn't make it true. The bulk of Nintendo revenue comes from outside Japan. So, as the Yen appreciates, as it has quite a bit this year, they actually lose money. A full 2/3's of the loss is due to currency exchange. As per gamasutra "Half-year losses were 70.2 billion yen ($926.3 million), missing Nintendo July forecast of a net loss of 35 billion yen ($461.9 million) for the half-year. The strong yen amounted to exchange losses of 52.4 billion yen ($691.6 million). Sales were 215 billion yen ($2.8 billion), missing the half-year forecast of 240 billion yen ($3.2 billion)"

I'd also like to point out that Nintendo only started reporting in the 1980's. So it the first loss in 30 years, not 100.

I never said that they never reported a loss but that they have been around for over 100 years and are in a very dark place right now. Other Japanese companies are making money right now and they are subject to the same yen changes. Nintendo can't blame the yen for their crap product line when their business is struggling (I never noticed Nintendo citing the weak yen several years ago for their success). Year one price cuts and terrible system sales (for the 3DS) are not the hallmark of a healthy company. When the Wii U has the same problems as the 3DS (and it will) Nintendo is going to start to have have some serious business sustainability issues. I love Nintendo and they have a very important place in my heart but I fear that they are losing their lifelong fans (like myself) fast.

[Colorado Rockies]

You can think it, but it doesn't make it true. The bulk of Nintendo revenue comes from outside Japan. So, as the Yen appreciates, as it has quite a bit this year, they actually lose money. A full 2/3's of the loss is due to currency exchange. As per gamasutra "Half-year losses were 70.2 billion yen ($926.3 million), missing Nintendo July forecast of a net loss of 35 billion yen ($461.9 million) for the half-year. The strong yen amounted to exchange losses of 52.4 billion yen ($691.6 million). Sales were 215 billion yen ($2.8 billion), missing the half-year forecast of 240 billion yen ($3.2 billion)"

I'd also like to point out that Nintendo only started reporting in the 1980's. So it the first loss in 30 years, not 100.

The Yen has been strong before and that didn't stop them from producing a profit. The current lack of games however....

[Orion Pimpdaddy]

Don't worry, Sega took losses for years before they had to leave the console business.

[dairugger]

They shoulda just released a system that downloads from the wii shop emulated games.. with a decent controller. and add more roms,, for fair prices.
system sell for like 90 bux. and screw the handhelds.

I see so many people buy handhelds.. and only turn them on for like 5 mins then shut em off. I think people buy those just to front them.

uh, no thanks!

[Aussie2B]

The Yen has been strong before and that didn't stop them from producing a profit. The current lack of games however....

I can't speak for the entire 30 year history during which Nintendo has been reporting their profits, but for the last 10 years at least, the yen is by far stronger now than before:

http://www.xe.com/currencycharts/?from=JPY&to=USD&view=10Y

And considering that I know Japan had some economic problems in the 90s, I doubt the yen was particularly strong then either.

[ScourDX]

The Smartphone/Tablet really steal the casual gamers away from Nintendo. Even parents these day buying kids smartphone or ipod touch.

[theclaw]

3DS has good hardware, built into a bad square-ish form factor. Tossing out its flat, stiff buttons would go far. Also ditch that glossy area surrounding the speakers / top screen. Gathers fingerprints and looks out of place with the bottom screen not having it. Etc.

[jonebone]

Currency conversion can only be to blame for the US sales, as Japenese sales would still be denominated in Yen.

As stated, it's simply because they release new handhelds like they are smartphones. Your DS is outdated within 6-12 months, and with money getting tighter nowadays, families realize that brand new versions are luxuries, and not a necessities.

The money is in software usually, so Nintendo needs to focus on that. The only 3DS game that has sold to expectations has been Zelda, and it's still just a remake. Maybe if they put out some new titles then they'll start making some money again.

[Nature Boy]

I would like to point out that the bulk of the loss was due to currency valuations/fluctuations.

Unless I misread the numbers, *ALL* of the loss was due to currency.

The article mentions they lost 20 Billion Yen (which is $264 Million).

Then it says their losses from the exchange rate alone was 'nearly $700 Million.'

Doesn't that mean that if the currency loss is taken out, they made $446 Million?

(Regardless, I'll be happy to point out to Nintendo Fan Boys that they can't say Nintendo has never lost money now, just to tick 'em off (it's not like that has ever mattered anyway))

[crazyjackcsa]

Currency conversion can only be to blame for the US sales, as Japenese sales would still be denominated in Yen.

Not true, as the U.S. dollar is the basis for international trade.

And you're all really missing the point:

Lets say you live in Japan, and have $1000 U.S. Got it? You have a grand.

Now, lets say (for fun) that's worth 10,000 yen (it isn't but it keeps the numbers easy).

Now a year later, the yen doubles in value against the U.S. Dollar.

You still have that 1k. but now it's only worth 5,000 yen.

HOLY SHIT YOU JUST LOST 5K in yen!!!!

Well, actually you didn't, but it needs to be reported as such. That issue coupled with the lower return per sale creates your loss.

[Ludwig]

The Smartphone/Tablet really steal the casual gamers away from Nintendo. Even parents these day buying kids smartphone or ipod touch.
I own that, and i still think it sucks great big hairy balls when it comes to gaming. I hope others think alike.

[Icarus Moonsight]

Not true, as the U.S. dollar is the basis for international trade.

And you're all really missing the point:

Lets say you live in Japan, and have $1000 U.S. Got it? You have a grand.

Now, lets say (for fun) that's worth 10,000 yen (it isn't but it keeps the numbers easy).

Now a year later, the yen doubles in value against the U.S. Dollar.

You still have that 1k. but now it's only worth 5,000 yen.

HOLY SHIT YOU JUST LOST 5K in yen!!!!

Well, actually you didn't, but it needs to be reported as such. That issue coupled with the lower return per sale creates your loss.

:cheers: Buy that guy a beer!

This isn't a dark time for Nintendo, it's a dark time for Western Empires old and new and their bullshit currencies. If the USD were to loose it's global reserve status... Maybe I should say, when. O_O The East would be getting pounded too right along side of us, but they have all the production so that makes their paper worth much more for that alone. Apparently Nintendo needs an Austrian consultant, or thirty. First powerpoint, Theft by the Printing Press.

[Snapple]

Yeah yeah yeah blah blah it's because of the yen.

I'm more interested in the word "ever." There hasn't been a single year previously that Nintendo lost money? There wasn't ONE year where people got tired of buying hanafuda cards in like the 1930s or something? Like, "You know I've been buying playing cards for 40 years, but I think I'll do so again this year."

That's a pretty amazing track record, honestly.


edit: Actually, you know, I'm calling BS on the "first loss ever" thing. Even if you only count years starting with Nintendo being a publicly traded company (which is 1962), according to what I'm reading the playing card market took a big downturn in the 1960s, and Nintendo stock plummeted and barely stayed afloat until Gunpei Yokoi started making toys for the company, starting in 1970.

[jonebone]

Not true, as the U.S. dollar is the basis for international trade.

And you're all really missing the point:

Lets say you live in Japan, and have $1000 U.S. Got it? You have a grand.

Now, lets say (for fun) that's worth 10,000 yen (it isn't but it keeps the numbers easy).

Now a year later, the yen doubles in value against the U.S. Dollar.

You still have that 1k. but now it's only worth 5,000 yen.

HOLY SHIT YOU JUST LOST 5K in yen!!!!

Well, actually you didn't, but it needs to be reported as such. That issue coupled with the lower return per sale creates your loss.

Maybe the dollar is the international basis of trade and for reporting, but I don't think that people walk around with dollar in their pockets over there. It's all Yen I'd assume.

So the better example would be:

You have 10,000 Yen which is worth $1k in Dollars today. A year from now it doubles in strength against the dollar. You still have 10,000 Yen, but it's worth $2k in Dollars. Your worth hasn't changed, it's just that your Yen buys twice as many Dollars as it did before.

I didn't know that foreign companies would be required to store all of their value in Dollars. Seems silly to me, and I had no idea that being a reserve currency had those kinds of implications.

Still, currency swings or not, if the currency swings are costing you millions of dollars, you're financial management staff needs to realize that and make the appropriate changes.

[Aussie2B]

I'm more interested in the word "ever." There hasn't been a single year previously that Nintendo lost money? There wasn't ONE year where people got tired of buying hanafuda cards in like the 1930s or something? Like, "You know I've been buying playing cards for 40 years, but I think I'll do so again this year."

That's a pretty amazing track record, honestly.


edit: Actually, you know, I'm calling BS on the "first loss ever" thing. Even if you only count years starting with Nintendo being a publicly traded company (which is 1962), according to what I'm reading the playing card market took a big downturn in the 1960s, and Nintendo stock plummeted and barely stayed afloat until Gunpei Yokoi started making toys for the company, starting in 1970.

Read the rest of the topic. It was already stated that it's only referring to the past 30 years in which Nintendo has been required to report their profits.

Jonebone, uh, I don't understand what's so hard to grasp about this. Nintendo doesn't store their money as US dollars within Japan, but they don't sell solely within Japan either. They do more business overseas, and when they pull that money back into Japan, it's worth less in yen than it had in the past.

[Fuyukaze]

Just glad this thread hasn't broke down to blaming Nintendo's loss on some game they didn't publish in North America as the reason. One game or eight, I fail to see that being the cause of such a massive loss.

[Baloo]

Just glad this thread hasn't broke down to blaming Nintendo's loss on some game they didn't publish in North America as the reason. One game or eight, I fail to see that being the cause of such a massive loss.

Those motherfuckers didn't release Pandora's Box or Xenoblade or The Last Story in the US. I WILL WATCH THEM FALL FOR THEIR IGNORANCE OF THEIR OWN PRODUCT THAT COULD HAVE MADE THEM MILLIONS.!!11!11!111!!!! :roll:

But in all reality, they really are in a big shitstorm right now with the fluctuating economy and the 3DS not selling as well as they hoped. But come the holiday season, I'm sure things will pick up.

Sure was a bad time for me to buy Nintendo stock back when they first came out with their earnings report...

[Icarus Moonsight]

jonebone: Nintendo held a majority of their liquid assets in USD. Hence...

[backguard]

This is the first time I seriously thought Nintendo might go the way of Sega.

[Press_Start]

So the better example would be:

You have 10,000 Yen which is worth $1k in Dollars today. A year from now it doubles in strength against the dollar. You still have 10,000 Yen, but it's worth $2k in Dollars. Your worth hasn't changed, it's just that your Yen buys twice as many Dollars as it did before.


You got it backwards. We're talking dollar to yen, not yen to dollar. Or to put in quantifiable terms:

Yen LEVEL 1.
Yen defeats Dollar Slime.....Gains 1000 EXP.
Yen LEVELS UP.
Yen defeats Dollar Slime.....Gains 500 EXP.
Yen feels sad.

Which explains why so many first-party goodies (i.e Last Story, Xenoblade) have favorably fallen to the PAL side since the Euro's 50% stronger than the US dollar in terms of the yen.

[ubersaurus]

It's doing very poorly in Japan, at least that's what I can find.

http://www.videogamer.com/news/third_of_japanese_3ds_owners_regret_their_purchase .html



The main reason why the original Gameboy did so well was because it was much cheaper than the competition and had a much longer battery life, plus it was bundled with a recent popular game that everyone wanted. What exactly does this new handheld have to offer besides the 3D? Not counting any games that are ports, sequels, or remakes of 10+ year old games. I can't think of anything that interests me, and I still haven't found a kiosk to try one out to see the 3D effect in person. I only saw one in a Best Buy and that was it, I haven't bothered to go back yet as I rarely shop there.

In any case I'm not surprised, they really released too many DS/DSi variants so I can't see many average consumers wanting to upgrade again with so few good games available for this new system.

Last I heard since the price drop, the 3DS has been selling extremely well for Nintendo in Japan, and pretty well elsewhere. Just once again, the bulk of their money comes from overseas sales, which means a strong yen hurts their bottom line.

[calthaer]

I agree with the currency fluctuation explanation for Nintendo's loss, but wanted to throw something else out there:

With a site like backloggery.com popping up, and all sorts of people taking stock of all the unfinished games they own...clearly it indicates that there are a lot of gamers out there with way more games than they can reasonably play. When economic times get tough, and gamers have to scrimp and save to make ends meet (just like anyone else), surely some of them are thinking that one place that they can easily save is in entertainment, since they have all the entertainment they'll need for the next decade stockpiled in the form of their collection.

Or, they may also be thinking that they can supplement their collection with the great, new indie games out there available for $10 or less right now. Quality $10 indie title lauded by the masses...or the next iteration of a Super Mario game that I already own on the last three or four Nintendo systems I own for $50-60...hmm...tough choice there. Or, substitute "Super Mario Game" with "new Nintendo console that's is marginally different from their current one, which I already own."

Just my $.02.

[duffmanth]

The Wii was brilliant, it was cheap and fun for everyone, that's in my opinion what people expect from Nintendo, they fallen from that quite a bit. The original GameBoy cost 100german mark here, if we account for inflation that still should be less than 80Eur. Well, it had to happen sooner or later, no big deal, they know how to pull themselves out of this again, many games though also leave a lot to be desired. Maybe a little loss is a good wakeup call, and hopefully in the end also good for quality.

The Wii was also a gimmicky and a novelty system from the start and has a shitty lineup of games to this day. A system is only going to last so long with those qualities. The 3DS is continuing the Nintendo tradition of shitty 3rd party games and rehashed first party games from 20 years ago. If Nintendo doesn't make an effort to get some more mature third party support and original first party games out, I think the Wii U will meet the same fate as the Wii?

[crazyjackcsa]

The Wii was also a gimmicky and a novelty system from the start and has a shitty lineup of games to this day. A system is only going to last so long with those qualities. The 3DS is continuing the Nintendo tradition of shitty 3rd party games and rehashed first party games from 20 years ago. If Nintendo doesn't make an effort to get some more mature third party support and original first party games out, I think the Wii U will meet the same fate as the Wii?

You mean become the biggest selling system of the generation, much to the disgust of the hardcore? Here's hoping.

[kupomogli]

You mean become the biggest selling system of the generation, much to the disgust of the hardcore? Here's hoping.

I'm pretty sure much of the casual base that purchased a Wii will have the sort of mindset that. "Hey. I bought into the hype and purchased a $200 placeholder, am I really going to do this again?" Especially when the Wii U's gimmick is far less interesting.

I like the idea of hooking the system up to an outlet and playing off the controller while over at a friends house, but do you really think most people will buy it for use as a portable console? I highly doubt it. If someone else just wants to use the tv, you can switch to the controller and still finish your game, but again, it's doubtful many will use this feature besides the few kids who don't have a tv of their own.

[Sunnyvale]

To all of you who thought the crash could never happen again, look at the foundation being laid. 2 consoles that break and one that only kids and grandma's play (for the most part). Add economic shittiness, and...
Not saying it's happening, or that it would be the same. But it wouldn't be surprising to see one or more of the big 3 leave the console business in the next few years, would it?

[The 1 2 P]

This is the first time I seriously thought Nintendo might go the way of Sega.

I think it would take Nintendo atleast two generations of console/handheld loses for that to happen. They may be losing money now but they made a ton over the first few years of this generation. As long as the 3DS or WiiU can pick up momentum then they should be just fine. But if neither of them take off then we can start the "getting out of the hardware business" conversation again.